Cold Snap Hits Hell

— Maybe it was a slow day. Nevertheless, I was stunned and delighted by the efficiency of the District of Columbia Department of Motor Vehicles. I stopped in to get a DC driver's license, and, get this, my number was called BEFORE I COULD FINISH FILLING OUT THE FORM! Then the photo guy called my name AS SOON AS I SAT DOWN. I think I waited a total of 45 seconds, surely a record.

Then, I went to get my emissions inspection. Again, I DID NOT WAIT (although Half St. SW is sort of hard to find.) It was done in maybe five minutes. I got my clean bill of automotive health, the sticker on my window, a pat on the ass, and I was on my way.

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Even in a “world of financial laissez faire” it is quite possible that there would be some private equivalent of the Fed. Just as in a world without government built roads, it is pretty unlikely we would simply do without roads!

While there are good theoretical reasons to think the private alternative Fed would probably be better, that is only a probability. It is even hard to even calculate the magnitude of that probability. In any event we can’t know what the specifics of that alterntive would be.

Given those impediments why not spend one’s energy advocating changes that might actually happen in lieu of amorphous alternative systems that aren’t in the realm of political possibility yet.

This assumes that central monetary planning is feasible and desirable, if just tweaked and tuned a little. If that assumption is incorrect, then we are wasting our time arguing about the details of middle-of-the-road policy. This is the same objection brought up in the recent Cato Unbound series on drug policy; a refusal by prohibitionists to even consider a policy of legalization, thereby assuming that it isn’t a complete waste of time to trim around the edges of prohibition.

Jim Gannon

How much more do you think the owners of big financial institutions will be donating to political campaigns in the future, now that we have established who decides which institutions get a bailout and which don’t?

One of the criticisms of markets that we frequently hear from it’s opponents is that markets are unstable, chaotic and inherently risky. They concede that it may make us wealthier in certain respects, but that they’d rather pay the cost in wealth for additional safety and stability.

Now you seem to be saying the opposite. Without the Fed’s meddling, the Austrians might be right and we can avoid the excessive boom and bust of market cycles brought on by interventionist economic policy, and thus have a smoother, more predictable, safer, and more stable business cycle.

Will, I suspect the unspoken response from Austrian economics to your concern could be summed up like so: “Sure there wouldn’t be such complex, globally integrated financial markets, but a substantial chunk of the ‘wealth’ created by the road we DID take is false anyway. The fallout from future crackup of this structure is worse than what we’d miss by not having it in the first place.”

Me approaching Austrian economics from a Left-wing grounding, I’d agree, and also add “besides, look who holds most of that false wealth”.